Publications

2017
Working Paper

Why and How Investors Use ESG Information: Evidence from a Global Survey

By: Georgios Serafeim

Using survey data from a sample of senior investment professionals from mainstream (i.e., not SRI funds) investment organizations, we provide insights into why and how investors use reported environmental, social, and governance (ESG) information. The primary reason... View Details

Keywords: Investment Management; Sustainability; ESG; ESG (Environmental, Social, Governance) Performance; Investment Fund; Investment Strategy; Corporate Accountability; Activist Shareholder; Engagement; Environment; Climate Change; Customers; Customer Satisfaction; Employee Engagement; Global Warming; Investment; Decision Making; Environmental Sustainability; Performance Expectations

SSRN

Charles C.Y. Wang is the Tandon Family Professor of Business Administration at Harvard Business School. He is a research member of the European Corporate Governance Institute (ECGI) and an associate editor of Management Science and Journal of Accounting Research,... View Details

March 2005 (Revised January 2006)
Case

Foreign Exchange Hedging Strategies at General Motors: Transactional and Translational Exposures

By: Mihir A. Desai and Mark Veblen

How should a multinational firm manage foreign exchange exposures? Examines transactional and translational exposures and alternative responses to these exposures by analyzing two specific hedging decisions by General Motors. Describes General Motors' corporate hedging... View Details

Keywords: Multinational Firms and Management; Currency Exchange Rate; Expansion; Credit Derivatives and Swaps; Financial Management; Investment Funds; Risk and Uncertainty; International Finance; Auto Industry

December 1999 (Revised December 2012)
Background Note

Measuring Interim Period Performance

By: David F. Hawkins

Covers interim period accounting objectives, theories, and practices. Special financial analysis concerns related to this topic are discussed. A rewritten version of an earlier note. View Details

Keywords: Accounting; Business Ventures; Policy; Management Practices and Processes; Measurement and Metrics; Performance Evaluation

August 2018
Case

Tapping Growth at Lord Hobo Brewing Company

By: Ethan Rouen and Susanna Gallani

Lord Hobo Brewing Company accounts for its inventory process as it prepares to create its first set of professional financial statements for investors. View Details

Keywords: Inventory; Start-ups; Craft Brewing; Investing; GAAP; Brand Management; Accounting; Working Capital; Entrepreneurship; Private Equity; Business Startups; Business and Shareholder Relations; Food and Beverage Industry; Boston; New England; United States

January 1987 (Revised March 1989)
Background Note

Note on the Pricing of Mortgage-Backed Securities

By: Jay O. Light and Jeremy C. Stein

An introduction to mortgage-backed securities, prepayment risk, and their market pricing. View Details

Keywords: Price; Debt Securities; Mortgages; Financial Services Industry

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Robert S. Kaplan is Senior Fellow and Marvin Bower Professor of Leadership Development, Emeritus at the Harvard Business School. He joined the HBS faculty in 1984 after spending 16 years on the faculty of the business school at Carnegie-Mellon University, where he... View Details

Keywords: health care; nonprofit industry

September 2006 (Revised February 2007)
Case

Timing of Option Grants at UnitedHealth Group (A)

Faced with press allegations that executives' stock options might have been backdated, the Board of UnitedHealth Group needs to determine whether its accounting for the options was proper, and if not, what the restatement amount should be and what... View Details

Keywords: Governing and Advisory Boards; Ethics; Stock Options; Accounting; Crisis Management; Corporate Governance; Insurance Industry; Health Industry; United States

Article

Can Mutual Fund Managers Pick Stocks? Evidence from Their Trades Prior to Earnings Announcements

By: Malcolm Baker, Lubomir Litov, Jessica Wachter and Jeffrey Wurgler

We consider measures of stock-picking skill of mutual fund managers based on the earnings announcement returns of the stocks that they hold and trade. Relative to standard approaches, this approach focuses on an especially informative subset of the returns data,... View Details

Keywords: Competency and Skills; Stocks; Investment Return; Investment Funds; Earnings Management

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March 2011 (Revised September 2014)
Case

Bridging the GAAPs

By: Gwen Yu

Inconsistencies in accounting treatment across countries are a major obstacle for global equity investment. Adoption of a single accounting standard (IFRS) has been received with much excitement, where apples to apples comparison across countries will become easier.... View Details

Keywords: Financial Reporting; International Accounting; Private Equity; Investment; Globalized Markets and Industries; Information Management; Standards; Valuation

2005
Working Paper

Can Mutual Fund Managers Pick Stocks? Evidence from Their Trades Prior to Earnings Announcements

By: Malcolm Baker, Lubomir Litov, Jessica Wachter and Jeffrey Wurgler

We consider measures of stock-picking skill of mutual fund managers based on the earnings announcement returns of the stocks that they hold and trade. Relative to standard approaches, this approach focuses on an especially informative subset of the returns data,... View Details

Keywords: Stocks; Asset Management; Business Earnings; Forecasting and Prediction; Competency and Skills

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07 Dec 2010
Working Paper Summaries

Towards an Understanding of the Role of Standard Setters in Standard Setting

Keywords: by Abigail Allen & Karthik Ramanna; Accounting

August 2009 (Revised July 2010)
Case

Choosing a GAAP for Canada

By: Karthik Ramanna and Beiting Cheng

Explores Canadian regulators' decision to adopt International Financial Reporting Standards (IFRS). The Canadian decision in 2005 to adopt IFRS is particularly interesting because Canada had well-developed domestic accounting standards and because a significant... View Details

Keywords: Financial Reporting; International Accounting; Cost vs Benefits; Governing Rules, Regulations, and Reforms; Standards; Accounting Industry; Canada

Research Summary

Mark Bradshaw examines how sell-side financial analysts incorporate accounting information in their earnings forecasts, common stock valuations, and investment recommendations. In addition, he analyzes management reporting of modified GAAP earnings figures to... View Details

September 2023
Article

Stock Price Reactions to ESG News: The Role of ESG Ratings and Disagreement

By: George Serafeim and Aaron Yoon

We investigate whether ESG ratings predict future ESG news and the associated market reactions. We find that the consensus rating predicts future news, but its predictive ability diminishes for firms with large disagreement between raters. Relation between news and... View Details

SSRN

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November 2009
Background Note

Business Valuation and the Cost of Capital

By: Timothy A. Luehrman

This note is an introduction to the cost of capital as used in discounted cash flow valuation analyses. The note covers basic financial economic principles and practical problems encountered in calculating the cost of capital, especially WACC. It concludes with... View Details

Keywords: Economics; Capital Budgeting; Cash Flow; Cost of Capital; Valuation